Coeur Mining announced an updated and re-scoped mine plan and a preliminary economic assessment for its Kensington gold mine in southeast Alaska.

The new mine plan reflects the recent discovery of the high-grade Jualin zone and indicates higher overall production and significantly higher cash flows due to the contribution of higher-grade material from three nearby zones.

The Jualin zone, located approximately 8,250 feet from current mining activities, continues to expand based on ongoing drilling and contains an average gold grade more than three times the average reserve grade of 0.185 oz/ton. Annual gold production between 2015 and 2020 at Kensington is expected to average approximately 128,000 oz, and costs will average $820/oz. Production in 2014 was 117,823 oz at an average cost of $951/oz.

“Our recent success identifying high-grade mineralization near existing Kensington infrastructure has added higher-margin production to our mine plan and significantly improved the expected economics of the mine,” said Mitch Krebs, president and CEO, Coeur Mining. “Kensington’s new mine plan is expected to be a key component of the company’s overall strategic repositioning that is expected to increase overall production levels by approximately 30%, reduce overall unit costs by approximately 25%, and boost the company’s free cash flow to $190-$200 million in 2017.”

Coeur estimates the capital required to place Jualin into production at $30 million and has an expected rate of return of around 70%.

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